The acquisition of the 481-mile short line connecting Quebec with northern New England — much of which is former CP trackage — comes 25 years after the Class I railroad pulled out of the region when it sold its lines east of Montreal. In a press release, President and CEO Keith Creel says the acquisition will help better serve customers and the region.
“This strategic acquisition gives CP a true coast-to-coast network across Canada and an increased presence in the eastern United States,” Creel says. “With additional port access, more dots on the map, and our proven precision scheduled railroading operating model we are confident this transaction will bring benefits to all stakeholders moving forward.”
The deal with CM&Q’s owner, Fortress Transportation and Infrastructure Investors, is expected to close before the end of the year. Fortress reported the $130 million price in a filing with the Securities and Exchange Commission. Fortress will retain ownership of Katahdin Railcar Services, a tank car cleaning and repair facility near Milo, Maine, and the contract to operate a 12-mile branch line at its Long Ridge Energy Terminal in Monroe County, Ohio.
“We are excited about this transaction as it brings value to our shareholders while ensuring that the CM&Q continues to provide safe and reliable rail transportation options,” says Fortress CEO Joe Adams.
The acquisition is the latest development in a long saga for the CP’s lines east of Montreal. In 1995, CP sold its main line from Montreal to Saint John, N.B. The section from Saint John to Brownville Junction, Maine, was sold to J.D. Irving and renamed the New Brunswick Southern and Eastern Maine Railways. The line from Brownville Junction to St. Jean (near Montreal), was sold to Iron Road Railways and merged with the Bangor & Aroostook. Iron Road later acquired CP’s line from Farnham, Que. south into Vermont as well.
In 2002, the Iron Road the railroad to Ed Burkhardt’s Rail World Inc. who renamed it the Montreal Maine & Atlantic. The MM&A struggled through the 2000s, thanks in large part to the decline of Maine’s paper industry. In 2010, MM&A sold a large chunk of the former BAR to the State of Maine that in turn leased it to J.D. Irving.
In July 2013, an MM&A oil train derailed and exploded in the small town of Lac-Mégantic, leveling more than 30 buildings and killing 47 people. The railroad filed for bankruptcy a month later and in 2014 it was sold to Fortress.
I smell a rat.
CP has defined itself as “heavy haul”, intermodal between Ontario and BC and coal, oil and grain.
What’s the value of what is essentially a branch line that goes through nowhere?
Searsport?
Unless they have grand plans to move grain for Europe through Searsport?
I wonder if CP gets the CM&Q locomotives, and in particular, its old red barns. They would be neat to see in CP colours again.
Remember the DM & E
Too bad they didn’t keep it in the first place probably all those citizens in Lac Megantic wouldn’t have been killed by Burkhardts junk yard train.
So to recap: CP sells, hundreds lose their jobs, railroad goes into the ground, more jobs lost, town destroyed, capital infusion, CP buys back.
All this churn and the only people who benefited were investment bankers.
Now add a certain class ones unwanted line across southern Michigan to complete the iron lariat, much as CN has done.
@Brian Rose: Maybe that is why the Canadian Government wants CP to buy it. So they can abandon it and then *no one* has to pay for the Lec Megantic Bypass.
any customers on that line can kiss rail service goodbye
Anyone know how much $ CP got in total when the sold the lines in the first place? Paying $130M to buy them back. Bizarre.
I wonder if this is because the Canadian Government changed their minds and wanted CM&Q to pay for the Lec Megantic Bypass?
Perhaps Fortress needs more cash to pay for the Brightline expansion?
It still has value bringing sour crude to be tankered to British refineries that used to process Brent, which is now declining.
This wouldn’t be the first time the Canadian government has intervened to get a US owned shortline back into their stable.
I always love it when a company spins off an asset, someone else increases its value, and the original owner buys it back.
@Charles Landey- Don’t be surprised if CP makes a move on the NBSR in the future
One wonders how long the CP will want to be bothered with the isolated Rockland Branch – bring back the Maine Eastern and its passenger trains!
Are they obtaining it to drive traffic away and abandon it?….a realistic option 25 years ago.
But no to St. John ????
VAR should read BAR
In 1969 there was a rumour that CP wanted to by the VAR so they could get to Searsport. It finally came true.
The carousel continues to turn? What about east of Brownville Jct which is owned by Irving?
FYI.
Derailment CM&Q.
https://www.cbc.ca/news/canada/montreal/west-bolton-derailment-mayors-1.5365639
Thank You.